ow Unit-level costs $285,000 Fixed costs $75,000 Total costs (a) $360,000 Markup (ax0.25) 90,000 Sales price per unit (b/15,000) $30 Required Fanning has excess capacity and receives a special order for 9,000 clocks for $23 each. Calculate the contribution margin per unit. Based on this, should fanning accept the special order? b) prepared a contribution margin income statement
ow Unit-level costs $285,000 Fixed costs $75,000 Total costs (a) $360,000 Markup (ax0.25) 90,000 Sales price per unit (b/15,000) $30 Required Fanning has excess capacity and receives a special order for 9,000 clocks for $23 each. Calculate the contribution margin per unit. Based on this, should fanning accept the special order? b) prepared a contribution margin income statement
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Fanning company which produces and sells a small digital clock bases its pricing strategy on a 25 percent markup on total cost based on annual production costs for $15,000 units of products, computations for the sales price per clock follow
Unit-level costs $285,000
Fixed costs $75,000
Total costs (a) $360,000
Markup (ax0.25) 90,000
Sales price per unit (b/15,000) $30
Required
Fanning has excess capacity and receives a special order for 9,000 clocks for $23 each. Calculate the contribution margin per unit. Based on this, should fanning accept the special order?
b) prepared a contribution margin income statement for the special order.
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